TILA News

Citibank has agreed to issue $335 million in refunds to an estimated 1.75 million credit card customers who were overcharged on their interest rates.

The Consumer Financial Protection Bureau (CFPB) recently announced a settlement with the Sioux Falls, S.D.-based bank. Four months ago, Citigroup publicly disclosed it was preparing to issue $330 million in refunds after the bank discovered it had overcharged some consumers.

Keep reading for details on the consent order, which also requires the bank to correct Truth in Lending Act (TILA) violations.

Although the Second Circuit Court of Appeals blocked a putative class action against Comenity Bank of Columbus, Ohio, by named-plaintiff Abigail Strubel, the court disagreed with the bank’s interpretation of Spokeo, Inc. v. Robins, under which the U.S. Supreme Court held that plaintiffs must show particularized and concrete harm for standing. Find out why.

The U.S. District Court for the Southern District of Florida recently was tasked with determining whether a plaintiff facing foreclosure adequately pleaded actual and statutory damages regarding the costs incurred while sending out requests for information (RFIs) and subsequent notices of error (NOEs). The court also considered the adequacy of the plaintiff’s TILA and injunctive relief claims. Find out which damages were upheld and which were struck down.

The Fourth Circuit Court of Appeals was tasked with reviewing the U.S. District Court for the District of Maryland’s decision to dismiss a plaintiff’s Fair Debt Collection Practices Act (FDCPA) claim along with her TILA and RESPA claims. It was alleged that Freddie Mac failed to provide her with timely notice of its loan purchase and that Wells Fargo, as servicer of the loan, failed to provide notice when the deed of trust was assigned to it.

The U.S. District Court for the Eastern District of Louisiana examined Wells Fargo’s motion to dismiss in a case alleging that the bank violated TILA, RESPA and breach of contract for failing to respond to borrowers’ requests for information. The court weighed whether the plaintiffs’ qualified written requests (QWRs) were valid based on the time they were sent.

The Supreme Court has granted certiorari to consider the validity of certain state credit card surcharge laws that have sought to regulate how merchants communicate price differences between “surcharges” and “discounts.” Is this any different from the fee-shifting action the CFPB took against an individual loan officer earlier this year? Read on to learn more.

An Ohio borrower sued his servicers for TILA and RESPA violations related to his request for rescission and a qualified written request for information. The defendants brought forth motions to dismiss on each claim, but the district court denied them all. Why did the borrower prevail? Read on to find out.

PNC Financial Services Group has agreed to pay $24 million after a predecessor institution it bought allegedly overcharged fees and interest for its secondary mortgages without accurately disclosing business arrangements or the terms of its loans, a violation of TILA and racketeering laws. The class is looking for more, however. Read on for the details.

In a pro se compliant against Fannie Mae and PHH Mortgage, the U.S. District Court for the Eastern District of Michigan was tasked with answering whether the plaintiff brought her claims within the requisite statute of limitations. The court specifically determined when tolling under the doctrines of equitable estoppel for fraudulent concealment and equitable tolling apply. Read on to learn more.

The Consumer Financial Protection Bureau and the Federal Reserve announced they were proposing changes to the thresholds for exempting certain consumer credit and lease transactions from TILA and the Consumer Leasing Act. Read on for details of the proposed changes.

Dive into the world of RESPA with enforcement expert Phil Schulman. Learn about co-marketing activities following the CFPB decision to close its investigation of Zillow, complying in a post-PHH world, and what enforcement looks like with new leadership at the CFPB.

12 USC Section 2605 or Section 6 is titled Servicing of mortgage loans and administration of escrow accounts. It pertains to qualified written requests, notices of transfer of servicing and the administration of escrow accounts.

An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.

An arrangement that involves a person who is in a position to refer business as part of a real estate settlement service and who has an interest in a settlement services provider.

In the arrangement, the person, who has either an affiliate relationship with or a direct or beneficial ownership interest of more than one percent in a settlement services provider, directly or indirectly refers business to that provider or influences a consumer to select that provider.

A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.

A mortgage disclosure that lists all estimated charges and fees associated with your loan. In addition to fees and charges, it will list your loan amount, mortgage rate, loan term and estimated monthly payment. Your escrows due at closing for insurance and taxes will also be outlined. Mortgage lenders are legally required to provide a GFE within three days of receiving your application.

Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.

Under RESPA Section 2605(e)(1)(B), a qualified written request is a written correspondence that includes: 1) the name and account of the borrower, or has enough information to allow the servicer identify that information; and 2) a statement of the reasons for the belief of the borrower that the account is in error or provides sufficient detail to the servicer regarding other information sought by the borrower.

A QWR cannot be written on a payment coupon or other payment medium supplied by the servicer.

Under Regulation X, required use means a situation in which a person must use a particular provider of a settlement service in order to have access to some distinct service or property, and the person will pay for the settlement service of the particular provider or will pay a charge attributable, in whole or in part, to the settlement service.

However, the offering of a package or (combination of settlement services) or the offering of discounts or rebates to consumers for the purchase of multiple settlement services does not constitute a required use. Any package or discount must be optional to the purchaser. The discount must be a true discount below the prices that are otherwise generally

12 USC Section 2607 or Section 8 is titled Prohibition against kickbacks and unearned fees. It prohibits fees or kickbacks for referrals. It also prohibits accepting a portion of fee except for services actually performed. Section 8 provides information on what payments are allowed under this section and the penalties for violations.

12 USC Section 2608 or Section 9 is titled Title companies; liability of seller. This section states that a seller cannot require, as a condition of selling the property, that title insurance be purchased by any particular title company. Section 9 states that a seller who violates this section is liable to the buyer for treble damages.

12 USC Section 2609 or Section 10 is titled Limitation on requirement of advance deposits in escrow accounts. It governs escrow accounts including notifications and statements to borrowers. Section 10 also sets out penalties for those who violate the section.

Under RESPA, settlement service includes any service provided in connection with a real estate settlement. The statute provides a list of services.

Under Regulation X, settlement service means any service provided in connection with a prospective or actual settlement. The regulation provides an extended list of services as compared to the statute.

RESPA Section 3 provides that a thing of value includes any payment, advance, funds, loan, service or other consideration

Regulation X says thing of value includes: monies, things, discounts, salaries, commissions, fees, duplicate payments of a charge, stock, dividends, distributions of partnership profits, franchise royalties, credits representing monies that may be paid at a future date, the opportunity to participate in a money-making program, retained or increased earnings, increased equity in a parent or subsidiary entity, special bank deposits or accounts, special or unusual banking terms, services of all types at special or free rates, sales or rentals at special prices or rates, lease or rental payments based in whole or in part on the amount of business referred, trips and payment of another person’s expenses or reduction in credit against an existing obligation.

A form used by a settlement or closing agent itemizing all charges imposed on a borrower and seller in a real estate transaction. This form represents the closing transaction and provides each party with a complete list of incoming and outgoing funds. RESPA requires the HUD-1 to be used as the standard real estate settlement form in all transactions in the U.S. involving federally related mortgage loans.